Furnace on the fritz? A new one doesn’t have to burn through your budget

How much does a new furnace cost?

It’s tough for a homeowner to hear the words, “You need a new furnace.” Learning a little about the types of units available and the price range can help you make a decision that is right for your home and your budget. But be prepared to spend up to $8,000, possibly more. Financing options include a home equity line of credit (HELOC) or a personal loan.

Types of furnaces

Before you start shopping around, it’s important to know the basic differences between different models of furnaces and have an idea of their cost.

Gas-fired furnace: These run on propane or natural gas and cost $3,000 to $6,000, including installation, but high-efficiency models will set you back $12,000 or more.

Oil-burning furnace: The most popular option, oil-burning units cost between $3,000 and $7,000.

Electric furnace: The most efficient option, an electric furnace is suitable for smaller living areas but not whole-house heating. These units cost between $1,000 and $3,000.

If you need to replace your duct work, that will add $3,000 to $7,000 to the cost of the project. For non-electric furnaces, you may need to upgrade your vent system, which can substantially add to the cost.

High-efficiency models

You may not need the most efficient or largest unit to adequately heat your home. Older furnaces were larger in size, but the new, smaller models put out just as much heat — or more. Take time with the contractor to calculate the heating needs of your house, making sure you buy the correct size unit.

A gas furnace from the 1970s has a low AFUE (annual fuel utilization efficiency, a measurement of how efficiently a furnace is converting fuel into heat) of about 65 percent. Today’s high-efficiency gas units have AFUEs of 97 percent, and generally cost at least $1,000 more than slightly lower-efficiency models. Higher efficiency furnaces also come with longer warranties.

Fan speeds

A furnace’s fan speed also helps determines cost. There are two basic speeds: single and variable.

Single-stage blower: This type of furnace simply goes on and off. When on, it works at 100 percent capacity. The single blower is less expensive and requires less maintenance than a variable-speed blower, but it’s not as efficient.

Two- and three-stage blowers: Variable-speed blowers start operating at 60 percent capacity, increasing when necessary. They may cost at least $500 to $600 more than a single-stage blower, but the heat is evenly delivered to reduce temperature swings.

Installation

Wherever you buy a furnace, make sure the installation, including removal of the old furnace, is included in the price. Find a reputable, licensed furnace contractor that has been in business for at least 10 to 15 years. An HVAC contractor may be required to have a separate plumber’s license, so ask what types of licenses the contractor holds. Expect to pay an HVAC pro $50 to $70 an hour for installation, in addition to permits, which add another $100, on average, to the cost.

If you are a seasoned DIYer, you may be able to score a good deal on a unit online. A top-of-the-line furnace may cost substantially less than it would if you bought it through a contractor (plus delivery charges).

Discount programs

Your local town hall may be a good source of information about whether there are rebates on high-efficiency furnaces, or interest-free loans for homeowners who buy Energy Star models.

Considering tapping your home equity to pay for your new furnace? Use our calculator to see what your monthly payments would be.

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